EAST COAST VIDEO SHOW

RANDY WEDDINGTON

ATLANTIC CITY, N.J. -- Survival was the focus at this year's East Coast Video Show here. Independent specialty retailers, which mostly patronize the event, looked to DVD and emerging new game platforms as their salvation in today's often combative and tough marketplace for home video. Faced with convergence in entertainment delivery, shorter pay-per-view windows, complicated revenue-share programs, and recent government scrutiny on how the entertainment industry markets to minors, the smaller independents vowed they would find ways to keep home video retailing viable.

The show, which ran from Sept. 26 to 28, opened with a lively (though sparsely attended) general session. Video Software Dealers Association chairman Tom Warren, in a nod to the CBS-TV pop-culture phenomenon, introduced the "Survival" theme. To drive this point home, Mike Becker of Video Room, New York, winner of VSDA's Retailer of the Year award in the under-five-store category, led an audience sing-along to the tune of Gloria Gaynor's "I Will Survive." This featured crowd-pleasing lyrics like "I've got popcorn there to give/If it rains I know I'll live" and "As long as there is DVD/I know I'll be alive."

Meanwhile, show organizers faced a pucity of attendees due largely to the change in VSDA convention dates, from July to January 7 to 9, 2000 at the Venetican Hotel & Sand Expo Center, Las Vegas, and to foul weather during the opening day.

Few supermarket representatives attended. Only Genuardi's Family Markets of Norristown, Pa. and Wakefern Food Corp. of Jamesburg, N. J., came to SN's attention on the floor, with Genuardi's video specialist Tim Ambrose commenting that "our company plans to stay in video." Others, like A & P, Montvale, N.J., and K-VA-T Food Stores, Abingdon, Va., "canceled just days before the show," said one source.

Indeed, exhibitors agreed that all traffic was down from the 7,750 attendees reported for last year's show, although official attendance figures hadn't yet been released by show organizer Home Video Entertainment Events of Santa Ana, Calif., or by its two sponsors, VSDA, based in Encino, Calif., and Advanstar Communications, Milford, Conn.

Observers felt the decline was largely due to VSDA's convention rescheduling, an explanation affirmed by SN's pre-show survey of specialists. "The main reason is that we had VSDA in July and we will have it again in January," said Bill Bryant, vice president of sales, grocery and drug, Ingram Entertainment, La Vergne, Tenn. "Attending the East Coast Video Show would have been three shows in six months -- a little bit much for most supermarkets."

Another factor, said one industry pundit, was that "there is no longer a clear distinction between the two events. VSDA used to be the entertainment show. But over the last couple of years it has shifted more attention to business and education, competing more directly with ECVS. Now some people -- especially those who enjoyed the autographs and giveaways -- no longer think they need to attend both shows."

ECVS also opened in rainy weather, creating a disincentive for the many day-trippers who usually arrive from nearby cities. "The first day there was a little inclemency," said VSDA president Bo Andersen, "which is good for the video business but bad for the show."

Despite these drawbacks, the business focus, traditionally stronger here than at the annual VSDA convention, continued to please exhibitors.

"You are already survivors," Andersen told an eager audience during his welcoming address, "but it is not the end of the game. You must realize a reasonable return...on your investment." He went on to outline VSDA projects with this aim, including a revenue sharing test that could ultimately benefit all retailers. "The fact that revenue sharing with all studios cannot today be done outside VSDA's test is something that must be changed," he said, "and there should be no further delay."

Andersen also spoke about plans for the first industry marketing campaign. "Customers need to be reminded of the value and enjoyment they find in their neighborhood home video store," he said.

About the "mischief afoot in Washington," Andersen -- who had testified the previous week before the Senate Judiciary Committee -- was concerned that "the Senate leadership now wants...to give the suppliers the right to cut off a retailer from product if the retailer does not do what they want him to do." He added that "this is much like herding the fox into the hen house."

Another topic in Andersen's issue-oriented address was the Protect Our Windows campaign, a call to action against "the poor economics of releases with short PPV windows." Andersen noted that "short windows are bad business and studio releases with short windows are almost never 'smart buys."'

Keynote speaker Paul Culberg, an inductee this year into Video Business magazine's Video Hall of Fame, addressed the topic of survival through change and recovery. "You are changing and learning and growing," he told the crowd, "and so are your customers. They want more, better, faster, smaller, and with advanced features." Some of the features on which he elaborated are those of the NUON-driven DVD players developed by VM Labs, Mountain View, Calif., which Culberg recently joined as executive vice president (and chief operating officer of its NUON division) after a long stint with Columbia TriStar Home Video, Culver City, Calif.

These issues and others became themes on the show floor, as suppliers and retailers made the most of networking opportunities.

With Senate hearings under way during the convention, some suppliers expected media violence to be a major floor topic. "We're surprised that more people haven't asked about the Federal Trade Commission report," said Neil Mitchell, marketing manager for the Troma Team Video operation of Troma Entertainment, New York. Troma is a likely magnet for such discussions, being well known for its large catalog of violent, unrated material. "Our product is mainly carried by the more independent, risk-taking stores," said Mitchell, "since chain stores like Blockbuster and Hollywood don't carry unrated titles."

Another exhibitor with violent fare that may appeal to minors, anime provider A.D. Vision, Houston, Texas responded that it does its own policing. "We have our own rating system," said Christy Guest, national sales manager of the company's ADV Films. "The FTC report could still be a concern for us, but it's too soon to tell."

Meanwhile larger studios responded directly to Senate accusations of minor targeting for inappropriate material. "New Line has always had its own niche," said Beth Gunderia, vice president of marketing, New Line Home Video, Los Angeles. "We've done a good job of marketing to the audiences our movies were made for."

One issue with more life, however, was that of revenue sharing. Both on the floor and in seminars the buying option sparked much discussion.

"Revenue sharing is the way to go for grocery stores," said Bruce Rotstein, vice president of sales, Supermarket Video Inc., Los Angeles. "It only makes sense for more depth and breadth." SVI operates shared revenue programs with product drawn from smaller studios. "We're becoming the arm of the independent studios to supermarkets," said Rotstein. "We came to meet with the studios -- we're getting more to join all the time."

Pay-per-transaction developer Rentrak Corp., Portland, Ore., also benefited from the buzz. "This show tends to do more business for us than the VSDA show," said Chris Roberts, Rentrak vice president of sales. The company had signed up 40 new accounts by the show's second day, Roberts said -- this despite its recent, well publicized takeover by discontented shareowners.

But opinions on revenue sharing varied considerably, even among its proponents. Brad Pelman, vice president of sales and marketing for Lions Gate Films of Toronto, Ontario -- a Rentrak supplier -- evaluated the option as "good for some but not for the industry in general."

Pelman also shared his views on supermarket participation in the industry. "Most supermarkets are not going into video for major profits," he said. "It's just another convenience for their customers. And they stock mainly 'A' titles, the hits that are female driven."

Most exhibitors concurred in proclaiming the show productive.

"ECVS has been very good for us," said Scott Haines, vice president of sales, Buena Vista Home Entertainment, Burbank, Calif. "We always enjoy meeting with independent retailers, and the discussions here are easier than at VSDA."